17 February 2020 (closed)
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Fully state-owned Perusahaan Listrik Negara (PLN), which holds a monopoly on electricity distribution in Indonesia, will soon acquire coal mining concessions in order to safeguard its future coal supplies and have a stronger position when negotiating coal prices with traders. PLN's power plants are estimated to require slightly more than 88 million tons in 2017, hence being the country's largest coal consumer.
Sofyan Basir, President Director of Perusahaan Listrik Negara (PLN), said the company will select a coal mine in Kalimantan for the acquisition. Besides a strategic location, this coal mine needs to have plenty of coal reserves and the right calorie level. As most of PLN's power plants are located on Java the company is ready to build a new coal terminal on both Kalimantan and Java to facilitate the movement of the commodity.
Basir added that various local coal miners in Kalimantan have already offered to be taken over by PLN. This makes sense, says Basir, because it would mean the coal mine has a big and long-term buyer. Considering coal prices remain volatile (having plunged between 2011-2016 but showing a sharp recovery in the second half of 2016) and highly dependent on policies in China, while more and more voices are advocating clean energy sources, the short-, middle-, and long term future of the coal mining industry remains somewhat uncertain.
With more coal-fired power plants being built in Indonesia (encouraged by the government's 35,000 MW energy program), PLN is expected to consume between 80 and 100 million tons by 2019 or 2020. PLN targets to complete the acquisition of a coal miner in Kalimantan before the end of the year.